Crypto Academy Season 3 | Intermediate course by @allbert -Task 1: A world of Wallets and Exchanges by Karupanocitizen

Time is running out, the stopwatch inexorably advances towards the deadline to deliver the task, the nerves complicate things a bit, but the excitement to participate and the feeling of doing something significant for my future and my personal growth is Greater than any probable fear, here I am developing the first assignment of the Crypto Academy intermediate course, in its season 3. The most satisfying of my challenges!

Thanks to our teacher @Allbert for the valuable informational material shared with us, an excellent and didactic conference that allows us to become familiar not only with the subject at hand: the world of wallets and exchanges, but also provides us with wise advice that will allow us to develop ourselves as investors or negotiators within the crypto world.

I must admit that, although I have been on our platform for four years, I always put more emphasis on developing my skills as a blogger than my knowledge about the trade and administration of crypto assets, to properly understand and explain the concepts applicable to the blockchain I usually use a lot the resource of comparing the "virtual world" with our "real" or material world, I think that that way it is easier to fix the information, therefore I hope that my level of understanding of the subject is adequate to meet expectations of the assigned task.

Differences between wallets and exchanges, what operations should be done on an exchange, and what operations should be done on a wallet.

Before starting to establish the difference between portfolios and exchanges, it is extremely important to be very clear about what each of these concepts consists of, what their characteristics are, and how important they are in our daily activities.

What is a wallet?

In our "real" world we need money to be able to make our purchases, this money we usually keep in a wallet or a bag, if we talk about cash or keep it deposited in a bank account, accessing it through debit cards, credit cards, and even applications to execute our payments, we will only need our account code and our user codes in online systems or keys to managing debit cards.

A wallet is software or hardware that allows us to store our cryptocurrencies and be able to make use of them when we need them, either to make payments, investments, or exchange operations, but with the advantage that we do not depend on any intermediary (bank ) to manage our money, we will always have direct access to them, as if it were just cash that we cannot physically touch or see.

Are there several types of wallets?

As professor @Allbert explained to us, there are two types of wallets: the hot wallet and the cold wallet. The former are those that have a direct and constant connection to the internet, while the latter are physical devices or hardware that do not have a direct connection to the internet.

Hot wallets, having a direct connection to the internet, are more exposed to cyberattacks, so experts recommend that when our crypto portfolio increases considerably, at the level of Elon Musk or Vítalin Buterin for example, the most advisable thing is to move our crytoactives to a cold wallet.

Within the Hot Wallet t, ordered from least to safest we have:

• On-line wallet (in the cloud): as the name implies, they work directly online or in the cloud, it is not necessary to download any software for them to work, they work in a very similar way to the exchange wallets. Our data and values ​​are stored in the cloud.

• Desktop wallets: they are those that are installed in the form of programs on our PC, the data and crypto values ​​are protected inside the computer's hard drive, but generally, our equipment has internet access.

• Mobile Wallet: they are the most used because, in addition to being able to have access to our cryptocurrencies at all times, smartphones are much less susceptible to viruses and hacks than the PC.

Trick: we can use a mobile, that we do not use daily and always keep disconnected from the internet, except in the case that we have to make some movement of cryptocurrencies, such as a kind of cold wallet.

Also within the Cold Wallets, ordered by their cost we can see:

• Wallet on paper: it seems a bit difficult to understand the concept in a digital world, but it is possible to store our digital currencies on paper. This is achieved by encrypting and printing on paper the unique keys of our cryptocurrencies, this transforms the sheet into something similar to a check or a super note, obviously without the risk of viruses or hacking. They are also cheap and easy to create through a paper wallet generator.

What is an Exchange?

The Exchanges are the platforms where the different cryptocurrencies are traded (bought-sold), there is where the movements (rises and falls) of the values ​​of cryptocurrencies are generated based on the supply and demand of the cryptographic market, something like the Wallstreet to trade crypto assets.

Exchanges also offer the wallet service, this could cause us confusion to understand the difference between the two, but this service is done to facilitate exchange operations, as we will see later and as explained in the lecture by professor @Allbert no It is not advisable to use these wallets to store our cryptocurrencies.

Taking into account all the money traffic that passes through exchanges, it is understood that they are favorite targets for attack by cybercriminals, which is why having our values ​​stored there for a long time increases our risk of losing them, the idea is to use them as bridges when we need to do trading operations on the Exchange while our operations last and then return our cryptocurrencies to our wallets.

Once we have understood what both wallets and exchanges consist of, it becomes easier to understand the difference between the two, as I detail in the table below:

Wallets	Exchanges
They are designed for the safeguarding and security of our cryptocurrencies.	They are designed to facilitate the purchase and sale of cryptocurrencies.
They are less exposed to cyber attacks Cybercriminal attacks and scams are frequent	They can be had on mobile devices, hardware, and even paper Only available for electronic devices online.
They serve their purpose best when offline.	They can only be used online.
Commissions are mainly calculated based on withdrawals made.	Commissions are calculated mainly based on the exchanges made.
Its security devices focus on the safeguarding and protection of stored cryptocurrencies.	Its security devices are focused on determining the identification of users and the availability of funds to carry out exchanges.
In some cases, such as trezor-type cold wallets, they have a relatively high acquisition cost.	Your registration is free.
It is not recommended for exchange operations.	It is not recommended for cryptocurrency safekeeping operations.
It is recommended to jealously guard the keys as they cannot be recovered.	If the keys are lost, they can be recovered.

Depending on the rates, where should we carry out each type of operation?

Being able to accurately determine the cost or commission for a cryptocurrency exchange or withdrawal operations will depend on each operator of the respective service and will be affected by the volume of operations, the number of available assets, and the costs of the resources used to supply the service, however, we must take into account that wallets are designed to save coins, while exchanges to trade with them.

From the above, it can be inferred that to be competitive, wallets offer better rates for withdrawal of funds, which is their main activity, while exchanges, focused on attracting exchange operations, will focus on discounts for the volume of operations carried out.

Taking Binance as an example, this Exchange charges a fee ranging from 0.1% to 0.04% of the total assets traded on its platform for each trading operation (if you use its token, the commission decreases by 50%) While for each operation to withdraw funds from the native Binance wallet, the exchange, in addition to establishing a minimum amount to withdraw, keeps a part of the withdrawn funds, this commission will depend on the type of crypto active.
For example, to withdraw Steem the minimum is 0.2 Steem and the withdrawal fee is 0.1 Steem, each time you make a withdrawal.

Tips: if you are going to store your cryptocurrencies it is cheaper to do it in a wallet not in an Exchange, if you are going to do exchange operations, it is better to use an Exchange.

Why have more than one exchange account?

Imagine that you are going to buy a certain product, let's say a mobile phone. Do you think it is convenient to consult different sellers to obtain a lower price? Where do you think it would be cheaper to buy, in the retail market or a large distributor? In the same way, exchanges work, the larger and with a greater number of operations, the lower the commissions they charge and therefore the higher the profitability we can obtain.
In the same way, there are very specialized exchanges where certain cryptocurrencies are traded, while others have a greater variety in terms of the currencies that are traded, so depending on the currency you have, you will be interested in one or another.

We must also consider that each market is a world, so it is always good to be able to handle a wide spectrum of offers for the cryptocurrencies that we have because precisely "playing" with price differences is what allows us to generate profit in operations trading.

So when choosing an Exchange we must take into account: volume of operations carried out, diversity of currencies handled, costs for commissions of exchange operations and withdrawal of crypto assets, even the prestige, security, and trust that they can generate in us.

Tips: in diversity, there is profit ;)

My Exchange

In addition to the native Steem exchange market, which is the one that I have used the most for obvious reasons, performing the exchange operations I use Binance, not only because it is one of the ones that handle the largest number of operations but because they have support for currencies. that I own, in this case, Steem, Tron and Hive. In addition, it is quite simple to use and the exchange commissions are relatively low (the higher the volume, the lower the commission).

Thanks to the completion of this task, now I also have KuCoin Exchange, then I will tell you how I am doing with this Exchange.

Wallets or exchanges, what is the best?

Like the previous question, the answer to this question will depend on the way we manage our cryptocurrencies, on what we intend to do with them.

If what we want is to hold and have our coins safe, it is best to keep them in a wallet, if the capital is very large, it is a cold wallet for greater security, now if our goal is to carry out trading operations, exchange coins to Take advantage of market fluctuations and constantly carry out buying and selling operations, it is best to use an Exchange.
Tips: safety, above all, keep part of the assets that you generate safely, diversify your portfolio, but also ensure your savings.

Now I will tell you how was the process of creating my new portfolio in Trust Wallet and my username in KuCoin Exchange.

I thought it would be a more complicated process to carry out, but creating my new wallet and registering in Kucoin was a simpler process than I initially thought, below I tell the step step for each them:

Creation of my Trust Wallet

I must admit that until now I had only used the steemit wallet and the Binance wallet (when I make exchanges), so creating a new one represented a great advance for me.

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Step 1

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Obviously the first step to follow is to search and download the application through the Play Store (for Android users) or the App Store (Apple users).

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Step 2

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The second step consists of choosing the creation of a new wallet and accepting the conditions of use

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Step 3

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The third step consists of obtaining, remembering and then placing a total of 12 words in the same requested order, as I have a bad memory I had to take a photo (that's why the image looks so ugly)

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Step 4

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Once the three previous steps have been carried out, we can start using our Wallet! As you can see, the process is very simple.

Important note: memorize well or save the verification phrases

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A view of my recently acquired wallet, if you do not notice it allows the exchange of coins

Registration in KuCoin Exchange

My registration in the KuCoin exchange was even easier ... I already show you.

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Step 1

The first step is obviously to download the exchange application, once downloaded immediately you will be able to see the quotations of the currencies, as well as the other market indicators, but do not get excited! You will not be able to do any operation until you register your user ... let's continue.

For the next step you must click on the image framed in red to create the user

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Step 2

To register the user (step 2) you will be asked for a phone number to validate your account. When you enter it, you will receive a text message with the code that you must place where the red arrow indicates.

Note: you can also validate the account through email, as I show you on the right side.

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Step 3

Step three is even easier ... just play with the figure they show you, you must place the puzzle piece in its place. xD

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Step 4

In my case, step 4 consisted of configuring another security element, registering my fingerprint to open the application

Note: I say in my case, because you can ignore that security option (but I recommend that you do not do it)

Then it allowed me to configure my access code (do not forget to write it down in case you forget it later)

Once the four previous steps have been carried out, you will be able to notice how the exchange already informs me that I can start buying or exchanging coins, also if you follow the red arrow you will notice that my user is already identified

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Conclution

We must know how to manage our cryptographic resources if we want them to be well protected and even, through trading, they can multiply, so it is of the utmost importance to be able to know how to handle these resources that professor @Albert explained to us so clearly.

I hope that my publication has all the requirements to be able to fulfill the weekly assignment.

We keep reading !!!